FBT returns can be time consuming and stressful. However, by utilising the legislation to its fullest you can minimise your FBT cash liability every quarter. Using some basic FBT rules to your advantage and approaching FBT compliance in a different way will benefit you. There are large savings to be made. Here are 5 ways you can pay less.
Alternate rate option
Reduce FBT by using the alternate rate option. Many employers avoid it due to its complexity. Yes, its complicated but in our experience the cash savings of attributing fringe benefits to employees is generally worth it.
De-minimis exemption
Actively structure unclassified benefits within the $300 per quarter de-minimus exemption to reduce FBT. This is often an afterthought, use it to your advantage.
Optimise pooling
Optimise pooling to reduce FBT by selecting the most efficient FBT option for each category (you can pay FBT using attribution or the pooling rate). In general, use the pooling rate where the majority of benefits in a category are provided to highly paid employees, attribute when not.
Speak to a FBT specialist about your FBT returns
FBT specialists can reduce your fringe benefit profile. Yes we know they are expensive but they know what they are doing and understand the legislation, which goes much deeper than the FBT guide. The fringe benefit rules are complicated and opportunities are often overlooked by businesses because the detail of return compliance often gets in the way of smart thinking. We recently set up a client in our software and discovered they had been overpaying thousands of dollars of FBT every quarter for the last 8 years. A simple conversation with their tax advisor would picked up the issue.
Reduce compliance costs
Spend less time preparing calculations and returns to reduce compliance costs. OK, not strictly a tax saving but a compliance cost saving but its a cost all the same. We have helped people reduce time spent from days to hours by introducing purpose built FBT software, robust process and efficient sense checking.